The next few weeks will see two companies challenge Hero MotoCorp’s supremacy in the value (also called executive) commuter space in motorcycles. It is also not for the first time that the duo, TVS Motor and Bajaj Auto, has thrown down the gauntlet to Hero’s Splendor and Passion brands.

Nearly 15 years ago, TVS had launched the 110cc Victor which turned out to be a runaway success and, for some months, proved more than a formidable opponent for the (then) Hero Honda. The Victor was comfortably averaging monthly sales of 40,000 units and was poised for bigger things, until it lost momentum even while the market leader quickly consolidated its position.

Yet, the creation of the Victor was significant as it paved the way for TVS to part ways with Suzuki, an ally since the 1980s. The Indian two-wheeler maker proved its competence in manufacturing with this bike and has been on its own since. The Victor is now poised for a comeback shortly and it will be interesting to see how it takes on Hero all over again.

Bajaj Auto’s challenge to Hero was in the form of the Discover 125 in 2004. It went in line with the company’s conviction of launching a differentiator product in the executive space. The Discover had the ingredients but did not settle down for a longer innings. It was revived subsequently in a host of avatars and the strategy seemed to work till it fizzled and Hero continued its march ahead. Bajaj is now gearing up to launch an all-new motorcycle which will hopefully do the trick in upsetting the Hero applecart. Not much is known about the offering except that it will sport a new name and lead the company’s charge in the commuter space. Whether the Discover will continue to coexist will eventually depend on the brand’s durability and relevance in the market.

Challenge The real challenge to the Splendor and Passion duopoly has come from its manufacturer’s erstwhile ally, Honda, with the Activa scooter. Thanks to its incredible showing of over two lakh units sold each month, scooters now account for a third of the executive commuter space. The Activa has clearly led the scooter boom which has prompted a host of companies to join the bandwagon.

While Honda reigns supreme, it may rue the fact that it has not been able to take on Hero directly with challenging bike models. Its Dream Yuga initiative has clearly not yielded the desired results and the company will now be hoping that the scooter juggernaut continues even while it revisits the drawing board to work out a new strategy for bikes.

The value commuter segment is a big draw for two-wheeler players primarily since it clocks up the largest volumes of nearly five lakh units each month. The Splendor and Passion are have been the clear leading brands for many years now despite naysayers predicting that Hero would be rudderless without Honda when they split over five years ago.

There is a school of thought which believes that market dynamics could change in the remainder of this decade.

In the first place, scooters have been making rapid inroads led by Honda and it is not entirely impossible to conceive that the Activa could just end up being on top. Sure, Hero is not going to yield ground in a hurry but rapid urbanisation and tough traffic conditions will continue to fuel scooter growth. Two, TVS and Bajaj are quietly consolidating their positions in the market. The former has hit pay dirt with the Jupiter and is now the second largest player in scooters. Overall sales have also been growing each month and a rejuvenated TVS would now be far more confident with its new Victor.

Bajaj, likewise, has strengthened its positions at the entry and premium end in motorcycles with a twin brand approach. This has the CT 100 and Platina coupled with the Pulsar and Avenger doubling up as the key catalysts. The big test, though, is with the new commuter bike which can logically ride on this new growth momentum. Till that happens, Hero will have a comfortable ride at the top. 

 

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